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Cannabis Central: A Conservative Approach To Investing In The Marijuana Industry

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7 major consumer and pharmaceutical corporations have bought into marijuana companies to take full advantage of this rapidly growing market and this article compares their stock performance YTD compared with that of their marijuana partners:

By Lorimer Wilson, editor of munKNEE.comA financial site for sore eyes and inquisitive minds

  1. Altria Group, Inc. (NYSE: MO) has a 45% stake in marijuana grower Cronos Group Inc. (Nasdaq: CRON).
    • YTD:
      • Altria has gone down 15.1% while
      • Cronos has gone down 14.9%
  2. Imperial (Tobacco) Brands PLC (LSE: IMB)(IMMBY) has a 19.9% stake in Auxly Cannabis Group Inc. (TSXV: XLY)(CBWTF), a vertically-integrated cannabis company with diverse international operations.
    • YTD:
    • Imperial has gone down 12.0% while
    • Auxly has gone down 42.6%
  3. Constellation Brands Inc. (NYSE: STZ) owns about 39% of Canopy Growth Corporation (TSX:WEED; NYSE: CGC) and should it exercise all its remaining warrants and full conversion of the notes, the company would own over 55% of Canopy Growth shares.
    • YTD:
      • Constellation has gone down 4.1% while
      • Canopy has gone down 18.3%
  4. Molson Coors Brewing Company (TSX: TPX; NYSE: TAP) has a 57.5%/42.5% joint venture with HEXO Corp. (TSX: HEXO; NYSE: HEXO) known as TRUSS.
    • YTD:
      • Molson has gone down 28.7% while
      • HEXO has gone down 50.9%
  5. Anheuser-Busch InBev SA (NYSE: BUD) has a $100 million joint venture with Canadian grower Tilray Inc. (Nasdaq: TLRY).
    • YTD:
      • Anheuser has gone down 35.9% while
      • Tilray has gone down 50.0%
  6. Novartis AG (NYSE: NVS) has a global agreement with Tilray Inc. (Nasdaq: TLRY) which allows Tilray to use the Sandoz supply chain, sales force, and global distribution network to distribute Tilray medical cannabis products.
    • YTD:
    • Novartis has gone down 0.9% while
    • Tilray has gone down 50.0%
  7. Alimentation Couche-Tard Inc. (TSX: ATD.B; TSX: ATD.A)(ANCUF), one of the world’s largest convenience shop retailers with 16,000 stores in 25 countries, has a 9.9% ownership (with the potential to increase to  50.1% in Fire & Flower Holdings Corp. (TSXV: FAF)(FFLWF).
    • YTD:
      • Couche-Tard has gone up 1.4% while
      • Fire & Flower has gone down 18.9%

In summary:

The 7 consumer products/pharmaceutical companies:

  • are down 11.9% on average YTD compared to their associated marijuana companies which are down 30.2% on average,
  • and 6 of the 7 consumer products/pharmaceutical companies (i.e. excluding Couche-Tard) have dividends that yield 2.4% on average while none of the marijuana companies have dividends.

Conclusion

Taking a look at the performance of the above companies one could conclude that conservative investors who want to invest in the marijuana sector might be better served by investing in the above mentioned major corporations than in their associated cannabis companies.

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About Lorimer Wilson

Lorimer Wilson with Gold BarLorimer Wilson is an economic & financial commentator who has written numerous articles on economics, finance, precious metals, and rare earth metals. He is the Editor of munKNEE.com a site that provides a selection of the internet’s best finance articles in an edited, reformatted and abridged format to ensure a fast and easy read. He is also a frequent contributor to TalkMarkets.com, eResearch.com, Gold-Eagle.comMarketOracle.co.uk and 24hGold.com


 
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